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Text: Peter Tarnoff Undersecretary of State for Political Affairs "Building a New Consensus on China" February 20, 1997

Allow me to begin by offering my condolences to Ambassador Li and the People's Republic of China on the death of Deng Xiaoping who was a major factor in China's policy of engagement and cooperation with the United States. His vision was indispensable to normalizing relations between the United States and China in 1979. In a long, active, and remarkable life, Deng Xiaoping's contributions to China's modernization and engagement in the international community are part of his and his nation's legacy. It is a sad coincidence that as we gather here today to commemorate a key event in U.S.-China relations -- the 1972 Shanghai Communiqu?-- we must also mourn Deng Xiaoping, a man who did so much in the decade after to foster closer ties with the United States.

Now let me turn to the future and most particularly the next 25 years of U.S.-China relations.

We all know what tremendous changes have occurred in Sino-U.S. relations since the signing of the Communiqu? We had little contact with the PRC before 1972, save for the occasional frosty meeting between officials in Warsaw and encounters between scholars and sports teams. Now, high level exchanges between our cabinet officials are routine. As I speak, Secretary Albright is headed to China. And this year both the Vice President and the Speaker of the House will travel to China, and summit visits will be scheduled. Our doors today not only are open to such high level exchanges, but to tens of thousands of Americans - and tens of thousands of Chinese - who are studying, working, and living in each others countries.

China's economy a quarter century ago was insular and centralized. I think it's fair to say the Shanghai Communiqu?helped to encourage in China an extraordinary period of opening to the world and economic change. Since 1972, China quadrupled its economic output. There was international isolation before 1972. Today the PRC participates in more than 1,000 international organizations.

Twenty-five years ago, we were still Cold War foes but today our Embassy in Beijing and our four consulates manage an immense flow of diplomatic, commercial, cultural, and educational interchange between our nations. For its part, China has integrated itself into the international economic and political system which has served to strengthen not only China's security, but regional and global security as well.

Each of these strides forward was the result of a conscious choice by the Chinese leadership to reform their economy and to play a more constructive international role. While these choices were not made as a result of U.S. pressures, the United States made the case to China that its participation in all aspects of international community was needed and that its growth and development were important to global stability and prosperity.

Here in America, such changes in China produced an era of optimism and a broad consensus that the road we had taken from Shanghai was the right one. But in the late 1980s, shifts in the strategic balance following the collapse of the Soviet Union, Taiwan's progress toward democracy, and, finally, the violent events of Tiananmen Square fractured this consensus.

One result of events in China was the decision to link China's progress on human rights to its Most Favored Nation trade status. It turned out, however, that the MFN stick threatened our interests as well as China's, putting our economic relationship with China -- and arguably our entire relationship -- on the line.

For that reason, the Clinton Administration moved away from five years in which the MFN debate overshadowed the sum and substance of our China policy and toward comprehensive engagement and a renewed strategic dialogue with China. We have pursued this dialogue as the most effective way to expand areas of cooperation on shared problems while dealing with our differences candidly, respectfully, patiently.

Our strategic dialogue with China is built around three propositions:

First, China is at an important point in its rich history with conflicting forces pulling inward toward nationalism and forces pulling outward toward integration. Despite its economic progress, the specter of social ferment remains a concern in a nation with 1.2 billion inhabitants. Since communism has withered away as a unifying ideology and until democracy is established -- fervent nationalism tempts the void.

In this regard, economic interaction is a powerful force, especially as it engages China and the U.S. with the international economy. Last year, foreign firms were the source of more than 40% of China's exports. Each ingredient of the new global economy -- computers and modems, faxes and photocopiers, contract law -- carries with it the seeds of greater openness and conformity with international practices.

Second, our strategic dialogue is based on the premise that our relationship with China is multifaceted - that no one issue should be allowed to put the entire relationship on hold. Our engagement on a broad range of subjects has yielded positive, albeit uneven results. There has been progress on many issues but we hope for more, and quicker progress.

For example, stopping the spread of weapons of mass destruction is one of this Administration's core foreign policy goals. China supported the Nonproliferation Treaty and the Chemical Weapons Convention and it plans to develop comprehensive national nuclear export controls. Our cooperation with China on this issue has been noteworthy, although difficult problems remain. We are urging China to comply with its commitment not to assist unsafeguarded nuclear facilities in third countries, to curtail nuclear cooperation with Iran, and to curb sales of missile-related equipment and technology to Iran and Pakistan.

On the economic front, we have done much together to our mutual benefit. Since Deng's reforms began, American firms have invested $175 billion in the Chinese economy. We have worked through some very tough trade concerns -- particularly the enforcement of our intellectual property rights and a recent agreement on textiles. Still, our growing trade deficit with China must be addressed, as has been done with our other Asian trading partners. Market access will remain a key issue on our bilateral agenda. And while China's accession to the WTO is in the interests of the world trading system, China must make commercially meaningful commitments.

China has also undertaken a constructive role on regional security matters. As the high tension of recent days reminds us, the Korean peninsula remains volatile - one of the most dangerous flashpoints on earth. Together with China, we worked to convince North Korea to freeze its dangerous nuclear program. China also agreed to take part in the Four Party Peace Talks proposed by South Korea and the U.S. to advance a lasting peace with North Korea. It remains very much in the interests of both China and the United States to use our influence jointly and wisely.

Let me spend a few moments discussing one of the most sensitive issues we have in our relations with China: human rights. Expanding our cooperation with China does not mean ignoring our differences. On the contrary, engagement permits frank discussion of differences, and the ability to put these differences into the perspective of a broad, important relationship.

Although deep belief in human rights is part of our American heritage, what we seek from the Chinese and other countries in the world where human rights practices are a concern -- is greater respect for basic rights that are universally recognized by the international community. We have asked China and will continue to do so -- to observe these internationally established norms. We will continue to speak out for human rights -- in China, as in other countries where conditions require us to do so. As Secretary Albright has said, we will tell it like it is.

Another aspect of our strategic dialogue with China relates to the future of Hong Kong. The process by which the United Kingdom and China reached their accord on Hong Kong was difficult but the result quite remarkable. In the Joint Declaration and Basic Law, China pledged to maintain Hong Kong's autonomy, freedoms, and way of life.

Nonetheless, we are concerned by some of the recent developments in Hong Kong, particularly proposals by China's preparatory committee to dilute basic human rights laws. At the same time, we must remember that the transition has been underway for 15 years, and Hong Kong has remained a thriving center of international trade. This will not end on July 1. And we will continue to have a significant stake in Hong Kong's future.

The third basic proposition behind our strategic dialogue is our enduring commitment to a "One China" policy. We have been heartened by the movement toward democracy in Taiwan. At the same time, our "One China" policy provides the stability necessary for a peaceful settlement of the Taiwan question by Chinese themselves.

Today's anniversary of the Shanghai Communiqu?marks an opportunity for all of us to work to build a renewed public consensus on China - a consensus that president Nixon succeeded in forging with the help of so many of you here today - a consensus which was weakened by the events in Tiananmen Square eight years ago. America's goal has not changed: to engage China as a constructive partner and responsible stakeholder in the international system.

To succeed will require both the vision and the courage President Nixon, Secretary Kissinger, Chairman Mao and premier Zhou brought to shanghai a quarter century ago. Today, the vision is to develop a new relationship between two great powers. Today, the courage requires China and the U.S. to deal with complex areas of agreement and disagreement in a spirit of respect and cooperation.

I can assure you that President Clinton and Secretary Albright are dedicated to this task.